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JPMorgan’s trading desk, one of the most closely watched sentiment gauges on Wall Street, has shifted to a bullish stance on US stocks. The catalyst: a ceasefire agreement involving the US, Israel, and Iran that has injected fresh optimism into markets rattled by months of geopolitical anxiety.
The pivot is significant because just weeks earlier, the same desk was telling clients to brace for downside. In March 2026, the team had adopted an explicitly bearish outlook, citing escalating conflict risks, inflation fears, and the very real possibility that disruptions to the Strait of Hormuz could choke global energy supplies.
From bearish to bullish in a matter of weeks
The trading desk’s reversal came in early April 2026, shortly after the ceasefire deal was announced. The agreement reopened the Strait of Hormuz, a chokepoint through which a massive share of the world’s oil supply flows. With that supply risk suddenly off the table, the desk flagged expectations for a relief rally driven by strong earnings forecasts and renewed market confidence.
The bullish call held even when the diplomatic picture got messier. By mid-April, Iran negotiations had reportedly stalled, but the desk maintained its optimistic positioning, with the desk’s bullish stance confirmed as of April 13, 2026.
That bet appears to have paid off. Markets rallied sharply through May and June 2026 on continued peace speculation, with both the S&P 500 and Nasdaq posting significant gains during the period.
Why the Strait of Hormuz matters more than you think
The Strait of Hormuz is a narrow waterway between Iran and Oman. A huge percentage of globally traded crude oil passes through it every day. When tensions in the region spike, energy traders price in the possibility that this corridor could be blocked or disrupted.
That’s exactly what happened in early 2026. As geopolitical risks escalated, the threat to Hormuz pushed energy prices higher, which fed into broader inflation concerns. For equity markets, this was a double hit: higher input costs for companies and the specter of central banks keeping interest rates elevated longer than expected.
JPMorgan’s broader 2026 outlook had already been constructive on global equities before the ceasefire. The bank forecast double-digit gains for the year, driven by robust earnings growth, supportive developments in AI, and a trajectory of declining interest rates. The Middle East conflict was flagged as a key downside risk that could introduce volatility.
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